Inflation Jumps; Zeta Raises $50Mn; Klarna Preps For IPO

Job openings fall. Chopra out at CFPB. Senators propose 10% credit card rate cap. Deel valued at $12.6Bn in secondary share sale. Jump, Anchor announce fundraises. Cushion shuts down. DailyPay mulls IPO. BNPL doesn’t hurt FICO scores.

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Inflation Jumps

Inflation jumped in January, dashing hopes of more Fed rate cuts in the near-term. Labor Department stats showed prices in January increased 0.5% from December on a seasonally adjusted basis, the largest monthly jump since August 2023. That equates to a year over year increase of 3% in January. Core inflation, which removes more volatile food and energy prices, was up 0.4% from December to January. Politicians and the media have zeroed in on the price of eggs, amid a bird flu outbreak and egg shortage that has seen prices jump to an average of $5 a dozen.

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What is Happening at the CFPB?

If you’ve had trouble following what is going on at the Consumer Financial Protection Bureau lately, you’re not alone. Recently confirmed Treasury Secretary Scott Bessent was briefly named as Acting Director of the CFPB, but was quickly replaced in that role once Russ Vought was confirmed to lead the Office of Management and Budget. Per the Vacancies Act, only other Senate-confirmed personnel or the “first assistant” to the vacant position can carry out duties in an “acting” capacity. Vought has previously worked for the Heritage Foundation and is considered to be a key architect of “Project 2025,” which advocates for eliminating the CFPB. Amidst the top-level staffing drama, several DOGE staffers have descended on the bureau, and Elon Musk posted “CFPB RIP,” with a tombstone emoji. Shortly thereafter, the CFPB’s homepage began displaying an error message, and the bureau’s account on X was deleted.

Acting Director Vought, on his first day at the bureau, indicated he would request $0 in additional funding from the Federal Reserve, writing on X that, “The Bureau’s current balance of $711.6 million is in fact excessive in the current fiscal environment. This spigot, long contributing to CFPB’s unaccountability, is now being turned off.” CFPB employees were ordered to stop essentially all work, including “all supervision and examination activity” and “all stakeholder engagement.” The National Treasury Employees Union, which represents CFPB staffers, filed two lawsuits, one seeking to block Vought’s orders and the other seeking to block DOGE’s access to employee records. Trump also nominated a permanent Director to lead what’s left of the CFPB, Jonathan McKernan, who had to step down from his role as an FDIC Director, owing to statutory limitations on how many directors of the same party can sit on its board.

Rapyd Looks to Raise in Substantial Downround

Rapyd, a merchant acquirer and cross-border payments platform, is in talks to raise $300 million, but at a steep valuation cut vs. its previous round, Bloomberg reports. The company was last valued at about $9Bn in 2021. Rapyd is discussing raising the new funding at valuation of $3.5Bn. Rapyd has leaned heavily on acquisitions to power its growth, including buying payment service provider PayU for $610Mn, Icelandic payment firm Valitor, and trading platform Neat.

Plaid Pursuing Secondary Share Sale

Plaid is reportedly working with Goldman Sachs on a secondary share sale. The share sale could raise between $300Mn and $400Mn, Bloomberg says. The tender offer would enable early investors and employees to access liquidity. Plaid last raised funding at a $13.4Bn valuation in 2021, during a time of elevated valuation multiples. The valuation of the tender offer is unknown but is understood to be below the $13.4Bn number, sources told Bloomberg.

Stripe Valuation Could Tick Up to $70Bn

Stripe is also reportedly exploring an employee share sale, which could value the company at as much as $85Bn. That would mark about a 20% increase from its $70Bn valuation in a secondary share sale last year, but still below the company’s peak $95Bn value in its 2021 $600Mn funding round. Discussions on the deal are ongoing, and terms could change.

Zeta Raises $50Mn from Strategic Investor

Card issuing platform Zeta announced it has secured $50Mn in new capital from an undisclosed investor. The “strategic” fundraise valued the company at $2Bn, according to a news release on the deal. That’s a significant markup from Zeta’s last known valuation of $1.15Bn in 2021, when Softbank led a $250Mn investment in the company. Zeta cofounder and CEO Bhavin Turakhia said, “Over the past few years, we have supported over 25 million accounts on our cloud-native processing platform Tachyon and are on track to add 25 million more with contracts already in flight.”

Klarna Gears Up for IPO

As Klarna gears up for an IPO, the company is announcing a number of new initiatives and partnerships. Company cofounder and CEO Sebastian Siemiatkowski posted on X that Klarna will “embrace crypto,” though he went on to ask his followers “what we should do with it.” Meanwhile, the company announced it is teaming up with JPMorgan Chase to enable the bank’s payments division’s merchant customers to make BNPL available to consumers. As part of the partnership, Klarna will join JPMorgan’s Payments Partner Network, which includes payment options through third parties like Mastercard, Visa, and FreedomPay. Regarding the IPO, the FT reports Klarna is aiming for an April listing and targeting a valuation that could reach $15Bn.

Affirm and FIS Partner

In other BNPL news, Affirm announced it is teaming up with core banking provider FIS to make its financing options available via FIS’ debit issuing bank clients. Banks that opt in will be able to offer functionality comparable to Affirm’s own debit card, which enables users to select qualifying transactions after the fact and convert them into pay-in-four or longer-term financing plans. Of the deal, co-president of banking solutions at FIS Jim Johnson said, “Consumers today are looking for innovative and user-friendly experiences that give them flexibility and control over their money.”